Mobile network operator and broadband ISP Vodafone UK is preparing to introduce a simpler pricing policy, which will replace their old inflation-linked approach to annual price hikes with one that simplifies things (i.e. by expressing future annual increases using a clear figure in pounds and pence).
The change is designed to reflect Ofcom’s recent move to BAN broadband ISPs and mobile operators from doing mid-contract price hikes that are linked to confusing inflation and percentage-based changes (here). For example, Vodafone’s current approach is to notify customers that their “monthly price will increase each April, by the Consumer Price Index rate of inflation published in January of that year + 3.9%.”
Ofcom’s change was never designed to stop mid-contract hikes completely (it’s more about making future package pricing clearer and simpler), but it did require providers to tell customers precisely what any future price increases would be when they sign up (“in pounds and pence“), which rules out changes linked to unknown future inflation values or percentages. BT has already adopted this approach (here) and others will follow.
Vodafone now appears to be planning something similar for introduction from 2nd July 2024 (i.e. this is when the policy will be introduced, not the price rise itself). Under this approach, the operator will seek to raise their monthly prices by £3 for home broadband and £1 for mobile on 1st April every year. People on social tariffs, as well as anybody registered as financially vulnerable, are not affected by the price rise.
A Spokesperson for Vodafone told ISPreview:
“It’s important to us that our customers have a clear and certain understanding of their bills throughout the length of their contracts, so we are moving away from inflation linked price rises from 2 July 2024 for our consumer customers and some small business customers.
In line with Ofcom’s consultation, before a customer takes out a new contract or re-contracts with us – from 2 July 2024, they will be told exactly what their contract will cost in pounds and pence, and when that price rise will occur.
For example, customers taking out a contract in August 2024, will see their bill adjusted in April 2025, and then in April 2026 by a set amount. Plans will increase from £1 a month on mobile and £3 a month for broadband customers. There will be no increases for customers registered as financially vulnerable or those on social tariffs.
Note: Customers purchasing through Curry’s will have a phased transition to the new pricing model.”
However, we understand that both out-of-contract and out-of-bundle charges may continue to increase by the old inflation method, which is because these aren’t covered by Ofcom’s change. At present there is no change for those on Vodafone’s Pay As You Go (PAYG) plans. Vodafone has informed ISPreview that they’ll have a more detailed blog up on this change later this morning, but it wasn’t yet live at the time of writing (we’ll update again later).